Critical Survey: The Clorox (CLX) versus Its Peers

The Clorox (NYSE: CLX) is one of 26 publicly-traded companies in the “SOAPS/COSMETICS” industry, but how does it contrast to its rivals? We will compare The Clorox to related businesses based on the strength of its institutional ownership, risk, profitability, dividends, earnings, analyst recommendations and valuation.

Institutional and Insider Ownership

75.7% of The Clorox shares are held by institutional investors. Comparatively, 56.0% of shares of all “SOAPS/COSMETICS” companies are held by institutional investors. 1.0% of The Clorox shares are held by insiders. Comparatively, 16.8% of shares of all “SOAPS/COSMETICS” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

The Clorox pays an annual dividend of $3.36 per share and has a dividend yield of 2.6%. The Clorox pays out 55.4% of its earnings in the form of a dividend. As a group, “SOAPS/COSMETICS” companies pay a dividend yield of 2.1% and pay out 55.6% of their earnings in the form of a dividend. The Clorox has increased its dividend for 40 consecutive years. The Clorox is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and price targets for The Clorox and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Clorox 0 10 2 0 2.17
The Clorox Competitors 307 1144 1130 29 2.34

The Clorox presently has a consensus target price of $131.62, suggesting a potential upside of 2.73%. As a group, “SOAPS/COSMETICS” companies have a potential downside of 2.29%. Given The Clorox’s higher possible upside, research analysts plainly believe The Clorox is more favorable than its rivals.

Volatility and Risk

The Clorox has a beta of 0.39, indicating that its stock price is 61% less volatile than the S&P 500. Comparatively, The Clorox’s rivals have a beta of 0.35, indicating that their average stock price is 65% less volatile than the S&P 500.

Profitability

This table compares The Clorox and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Clorox 13.21% 126.70% 15.69%
The Clorox Competitors 0.18% 21.74% -3.77%

Earnings and Valuation

This table compares The Clorox and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
The Clorox $5.97 billion $701.00 million 21.14
The Clorox Competitors $15.45 billion $2.24 billion 25.79

The Clorox’s rivals have higher revenue and earnings than The Clorox. The Clorox is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

The Clorox beats its rivals on 8 of the 15 factors compared.

About The Clorox

The Clorox Company is a manufacturer and marketer of consumer and professional products. The Company sells its products primarily through mass retail outlets, e-commerce channels, wholesale distributors and medical supply distributors. The Company operates through four segments: Cleaning, Household, Lifestyle and International. Its Cleaning segment consists of laundry, home care and professional products marketed and sold in the United States. Its Household segment consists of charcoal, cat litter and plastic bags, wraps and container products marketed and sold in the United States. Its Lifestyle segment consists of food products, water-filtration systems and filters, and natural personal care products marketed and sold in the United States. Its International segment consists of products sold outside the United States. It markets some of the consumer brand names, such as namesake bleach and cleaning products, Pine-Sol cleaners, Liquid-Plumr clog removers and Kingsford charcoal.

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